Unnecessary Litigation - Besides financial costs, litigation also entails tarnishing image of Department and straining its resources - CBDT Member
THE apathy of the Department Officers is evident in another shocking incident where in a sensitive search case, appeal was filed by the Department in High Court. The Registry pointed out certain defects in filing of appeal and the Court granted time to remove the defects. This relates to the year 2009. From 2009 till 2014, no follow-up action was taken and the case was dismissed due to default on part of the Department in curing procedural defects. The Department filed a MA praying for restoration of the main appeal and subsequently a Review Petition, which were dismissed by the Court. When the matter travelled to the Supreme Court, the Apex court has taken a serious view and directed that Department ascertain and fix responsibility on the individual/(s) guilty of inaction and for taking appropriate action against them for such inaction. This default was compounded by the fact that the SLP was filed after a delay of 240 days.
This is not DDT lambasting the Department; these are the words of Mr. SK Ray, Member, CBDT in a D.O Letter.
The Member refers to three other cases:
1. In Prescon Builders Pvt. Ltd . - 2015-TIOL-703-ITAT-MUM, the ITAT observed, "At least the senior officer such as Commissioner of Income Tax should have carefully perused the record and CIT(A)'s order before granting authorisation. The very fact that the AO filed the appeals without even verifying the year, which was mentioned in the grounds of appeal, also indicates that the appeals were filed in a routine manner which causes lot of inconvenience to the taxpayers and such a practice should be deprecated."
2. In CIT-2 Vs. State Bank of India - , the High Court noted that where the Revenue has accepted the order by not preferring any Appeal against the earlier order, the Revenue should not challenge the subsequent order on the same issue. In case an appeal is preferred from the subsequent order, then the Memo of appeal must indicate the reasons as to why an appeal is being preferred in the later case when no appeal was preferred against the earlier order of the Tribunal which has merely been followed in the later case. The absence of this being indicative of non-application of mind, does undoubtedly give an opportunity to the Revenue to arbitrarily pick and choose the orders of the Tribunal which they would challenge in the Appeal before the Court.
3. In the case of Sh. S. Ganesh - 2015-TIOL-1072-ITAT-MUM, the ITAT observed, that the act of disregard and disobedience of the orders of the higher judicial authorities in hierarchy amounts to the gross abuse of process of law and is an act which tends to lower down the authority of the higher courts. In this case an appeal was filed on an issue settled by the ITAT in its earlier decision in the same case.
The CBDT Member notes that despite several instructions on the subject, necessary due diligence and caution is not being exercised while granting authorization for filing of appeals.
The Member concludes, "Further, besides financial costs, litigation also entails tarnishing the image of the Department and straining its resources. The significance of filing appeal and pursuing litigation only in deserving cases cannot be over-emphasized, more so in the backdrop of the fact that Department is facing shortage of officers at all levels. It is imperative that the available resources are optimally utilized to obtain maximum benefit out of litigation."
Will the field follow his instructions?